Knocking down imaginary walls

The distinction between brand and reputation is increasingly a distinction without a difference. This article highlights this change and what it means to help organisations benefit from the opportunities this new reality provides.

We are living in a time when our understanding of how the world works is being re-evaluated.

The rise of populism, the end of globalisation, what is fact and what is fiction – suddenly, we are trying to make sense of changes that have been developing for years, but are only now making themselves clear.

The same tectonic shifts have been occurring in the worlds of brand and reputation. What was once seen as separate is now blurred together. Recent survey data suggest that most senior in-house communications professionals across Europe do not see the change itself – 73 per cent continue to see brand and reputation as very distinct concepts.1 However, a majority of these same professionals (57 per cent) say their organisation is acting on this change by managing brand and reputation together, primarily to avoid reputational risk. The distinction between brand and reputation is increasingly a distinction without a difference.

Most communications professionals have yet to recognise that this new relationship is an opportunity for companies and other organisations to build and manage brand and reputation to not only avoid risk but to also create value. It is time to highlight this change so that communications professionals can help their organisations benefit from the opportunities this new reality provides. Examples of best practice are cited in this article to highlight how, today, delivering a successful business strategy requires recognising, understanding and taking advantage of the changed nature of this relationship between brand and reputation.

Why and how this change occurred

The relationship between brand and reputation has changed because the world has changed.

Brand is the promise, reputation is the degree to which the promise is heard, understood and acted on. Brand is the expression, reputation the impression. Brand is owned by the company and reputation is owned by stakeholders... We know and use these definitions in our work to explain and justify why and how we have historically managed brand and reputation separately. But the changes we are witnessing in information, attitudes and audiences make these distinctions irrelevant. How people receive and process information has changed in ways that make delivering a corporate strategy – and building a brand and managing reputation the old way – harder. For example:

Availability of and speed of access to information.Nearly everything is available online and easily accessible. When someone has a positive or negative experience with a product or service, it takes about 30 seconds for them to identify the company behind it – for better or worse.

Low levels of trust.Many people don’t trust traditional institutions or information sources. Peer to peer and self-selected news sources mean people are getting a skewed, incomplete view of reality.

Confirmation bias. People tend to focus on and believe information that confirms their opinions and values and to discount non-conforming information. Social networks like Facebook where people receive a constant stream of “news” that has been curated by algorithms, like-minded friends and family only reinforce this tendency.

Post-fact world. As the US elections and Brexit demonstrate, we are living in a world where fact and fiction are increasingly blurred. People believe facts can be spun. Everyone is perceived to be manipulating facts to their advantage – or just lying. In this new environment, perceptions, feelings and experience are given more weight than “facts” presented by “experts”.

Information overload. As communicators, we have to contend with the reality that our audiences are swimming in information. In fact, “information overload” is cited by 60 per cent of senior European in-house communicators as a source of concern in their work2. Getting positive cut through is difficult, though negative information seems to have much less trouble registering with people.

Radical transparency. The fact that electronic information, such as emails and text messages, live forever (data permanence) means companies have to operate under the premise that employees’ electronic communications could end up in the public domain. Building a corporate culture based on complete transparency may seem difficult to impossible, but increasingly necessary.

Stakeholders vs. consumers. In the past, communicating and engaging with stakeholders and consumers was done in a segmented fashion. Now, given all the changes above, this wall has also broken down. Because of social media, consumers are stakeholders and, because they have emotional connections to brands like everyone else, stakeholders are consumers.

Why it matters

This is the environment into which companies and other organisations must tell their story, sell their strategy and market their products. Even with this more complicated setting, people still look at what a company does and says as indicators of intent and purpose – and whether or not to trust and engage with them.

Gaps between what a company says and does, and consumers’ and stakeholders’ experience of these words and deeds, are more likely to be noticed and acted upon today than ever before. The desire for many organisations to talk about social purpose compounds the risk. To allow disconnects between brand and reputation threatens not only reputation but also sales, employer attractiveness, and community and government support.

"Gaps between what a company says and does... are more likely to be noticed and acted upon today than ever before."

From a management perspective, treating brand and reputation as two faces of the same coin makes sense in today’s fast-paced, emotion-over-facts world. Corporate reputation, sometimes seen as the poor step-child to brand, is now considered a critical driver or inhibitor of brand strategy and business growth.

However, what has yet to happen widely is rigorously and systematically managing them together. That, too, is changing. A recent article in Raconteur magazine entitled “Smart Companies See Brand and Reputation as One” makes the argument that the two concepts are so interlinked that many “smart companies are taking a proactive, long-term approach to manage their reputation while investing in their brand.”

Moreover, there is a growing body of evidence on the power and importance of the relationship between brand and reputation. Nielsen recently issued a study demonstrating the two-way relationship between corporate reputation and brand, each one driving the other – “corporate reputation makes it easier to implement brand strategies” and “consumer perceptions of brand quality (positive or negative) can influence a company’s reputation.”3 Nielsen highlights examples where brand has driven reputation (Samsung) and where reputation has driven brand (Sears). Regardless of the direction of the effect, the impact was the same: a more successful business strategy.

What organisations are doing

Chris Nurko, chairman of FutureBrand, summarises the current situation for most companies and organisations:

“Companies don’t overtly manage brand and reputation together in one function, or one organisational goal…they blur the lines of ‘brand’ (to embrace all aspects of product, service, experience), brand management (typically the responsibility of advertising/marketing externally, and talent internally); and reputation (the role of corporate communications). However, they are two sides of the same coin, in that brand, the stakeholders and audiences and the effect of a brand’s experience, creates the reputation. Brand marketeers and their consulting partners will increasingly need to weigh synergies between the brand promise and the corporate mission and image, and consider a broader range of stakeholders and their agendas when managing brand portfolios and reputation and risk. Ultimately, new analytic frameworks will be required to meet new measurement requirements for the business.”

In short, expect to see more proactive, joined-up management of brand and reputation.

Those companies and organisations that are managing brand and reputation together now tend to be active in four areas:

Structures : Corporate leadership in some organisations have sharpened their compliance and governance practices to bring reputation into the boardroom. Reputation risk is now analysed, quantified, and managed. More and more companies (e.g., AT&T, Standard Chartered, Barclays, etc.) are creating task forces or committees to oversee reputation and brand, and empowering them to hire external consultants to advise and support them.

Capabilities: Companies are creating new roles and capabilities internally as well, such as chief risk and reputation officer, chief ethics officer, or other roles such as head of reputation strategy to ensure alignment between brand, reputation and other aspects of corporate behaviour. A desire for greater control, consistency and accountability across audiences, geographies and channels is the main driver for this change.

Engagement and communications: Some companies (especially consumer facing ones) have gotten better at identifying the audiences that matter most to the organisation, what matters most to the organisation and aligning with societal expectations to be more effective at engaging and communicating with their audiences.

McDonald’s, Coca-Cola and Unilever are best practice examples of how to engage with stakeholders: bring them to the table to discuss planned policies and practices during the development phase (rather than after the fact) to air concerns and expectations to ensure they create rather than destroy business value. Moreover, companies like these are at the forefront of making sure they are delivering a consistent story across all audiences. The result is a more effective business strategy. What is increasingly common practice in the consumer space is likely to spread to the B2B space as its benefits become more widely known.

Measurement: Having an impact and making the business case to management are essential. By mapping the digital and offline stakeholder landscapes, listening first, using consistent metrics to measure brand and reputation, tying them to desired business outcomes, and using evaluation tools to track and reduce the gap between the expression of the brand and the impression it is making on reputation, leading edge organisations (such as Johnson and Johnson, the Bill and Melinda Gates Foundation, and Exelon) are developing the data points necessary to show the positive impact their efforts are having on driving business value.

What next?

Things are moving in the right direction. Reputation is increasingly the focus of the top level of organisations and as a strategic asset to build and enhance jointly with brand. Senior leaders get it. And senior in-houses across sectors and organisational types are actively engaged in reputation building. However, as one would expect, most organisations still approach the change from the perspective of risk rather than opportunity. Managing risk remains an easier sell than opportunity. A Switzerland-based director of corporate communications sums it up:

“We have a head of risk who manages potential issues which have been identified that could impact business - anywhere from operational issues to doomsday scenarios - but managing risk is quite a bit different than proactively managing reputation and dedicating time and resources to do so.”

Forward-thinking companies and organisations will continue to create the conditions for proactively managing brand and reputation together, not only for risk but also opportunity. Research shows that those organisations that are managing reputation for opportunity and not just risk are more likely to be engaging in best practice than those that are only focused on avoiding risk4.

Why do they do it? Because they believe it works and see clear upside. Opportunity-focused organisations are more likely than risk-focused organisations to have senior leadership that views reputation as very important to achieving business outcomes – and are less likely to expect to experience a reputational crisis in the next five years. They are also more likely to expect to experience other benefits that create tangible value for their organisations, such as trust to deliver on promises, greater employee engagement, attraction and retention, and increased likelihood to deliver strategic, reputational and commercial goals.

In a world where it is increasingly hard for anyone to predict what will happen next, one thing seems clear: the wall between brand and reputation will continue to be knocked down as more organisations realise the benefits of managing them together.5